Left Ireland should I notify Revenue?

kegzmc

Hi there,

I have left Ireland permanently to live in another European country. Do I need to notify anybody in relation to renting house out, no longer working in Ireland etc?

murphaph

kegzmc wrote: »

Hi there,

I have left Ireland permanently to live in another European country. Do I need to notify anybody in relation to renting house out, no longer working in Ireland etc?

As regards the renting out:
You are supposed to appoint an agent who gets their own PPS number with which they do tax returns on your behalf. In practice Revenue don't enforce this (IME) so long as the returns are being made by someone. You don't have to send a letter to Revenue saying "I'm not here anymore" in this regard.

As regards your not working in Ireland anymore:
You may well want to tell Revenue about this as you could be due a refund for overpayment of income tax if you are leaving a PAYE job mid year (and with it leaving Ireland).

To be honest, I think you may need some professional advice before you end up getting into hot water with Revenue.

Are you registered with the PRTB for example?

snubbleste

You don't need to appoint an agent to manage your property, it's either that or your tenants withold 20% of the rent and pass it to Revenue.

kegzmc

No not registered with any agencies yet. Why should my tenents hold on to the 20%?

seamus

kegzmc wrote: »

No not registered with any agencies yet. Why should my tenents hold on to the 20%?

Income tax is payable on all rent collected from a property in Ireland, regardless of where the landlord is based.

Where the tenant pays the rent directly to a foreign-based landlord, they are required by law to withhold 20% of it as tax and submit it to Revenue.

relax carry on

kegzmc wrote: »

No not registered with any agencies yet. Why should my tenents hold on to the 20%?

Try Revenues guide to rental income. Pay attention to the non resident landlord bit.

http://www.revenue.ie/en/tax/it/leaflets/it70.html#section21

Also, its never any harm to contact Revenue when you have any change in your circumstances. Becoming non resident is a pretty big change in your circumstances.

murphaph

snubbleste wrote: »

You don't need to appoint an agent to manage your property, it's either that or your tenants withold 20% of the rent and pass it to Revenue.

In practicality this is not an option. Few tenants will even consider getting involved and few landlords want them to.

murphaph

Seek good professional advice OP. You can generally hold on to your ordinary residence for 3 years and this would entitle you to to claim the same reliefs as a resident! I had to argue with Revenue over this but won the toss and it was in my favour to do so.

The merits of retaining Irish tax residency for as long as possible will differ depending on what EU state you are going to live in, if you are going to be working in PAYE type employment and so on.

It's not widely know but an ordinary Irish resident working in "PAYE type employment" in another EU state is entitled to the PAYE allowance on their rental income in Ireland. These reliefs could be the difference between paying the full 20% income tax (say 2 Grand on a house in Dublin with no mortgage) and just paying PRSI @ 3%!! (the single person allowance and PAYE allowance come to more than 3 grand so there'd be no income tax due, for example.

It is simpler once you are 100% certain you are non-resident, but for the 3 years after leaving you could save or cost yourself a lot of money by doing it wrong.

kegzmc

OK great. Thanks for the advice.

I have loads to do I suppose. Join up with the PRSB. Inform bank to remove my TRS etc.

When you say seek professional advice: should i contact an accountant?

murphaph

kegzmc wrote: »

OK great. Thanks for the advice.

I have loads to do I suppose. Join up with the PRSB. Inform bank to remove my TRS etc.

When you say seek professional advice: should i contact an accountant?

I would in your shoes (but not just anybody, someone who knows about the tax implications of non-residency etc-my own accountant never spotted that I was entitled to the PAYE relief as I was working in Germany he assumed (incorrectly) that I wouldn't be), at least for your first return or 2. Becoming non-resident has fairly far reaching tax implications that can be costly if you get them wrong.

As for informing the bank.....

I wouldn't say a word to them in case they try to bump you off onto some sh!tty rate "investment mortgage". You should (must) contact Revenue and instruct them to cancel your TRS. They will in turn instruct the bank to concel it but will not tell them why.

You get much better allowances (75% of interest) as a landlord anyway, so TRS is no loss to you. Both reliefs will be phased out (by 2017 I believe).

Your bank loan offer may require you to inform them if you wish to rent your home out...I would not be in a hurry to do so however

kegzmc

murphaph wrote: »

I would in your shoes (but not just anybody, someone who knows about the tax implications of non-residency etc-my own accountant never spotted that I was entitled to the PAYE relief as I was working in Germany he assumed (incorrectly) that I wouldn't be), at least for your first return or 2. Becoming non-resident has fairly far reaching tax implications that can be costly if you get them wrong.

As for informing the bank.....

I wouldn't say a word to them in case they try to bump you off onto some sh!tty rate "investment mortgage". You should (must) contact Revenue and instruct them to cancel your TRS. They will in turn instruct the bank to concel it but will not tell them why.

You get much better allowances (75% of interest) as a landlord anyway, so TRS is no loss to you. Both reliefs will be phased out (by 2017 I believe).

Your bank loan offer may require you to inform them if you wish to rent your home out...I would not be in a hurry to do so however

Wow, so you mean by losing the TRS I actually can recoup that loss elsewhere?

I have no idea of this stuff. Any links?

murphaph

kegzmc wrote: »

Wow, so you mean by losing the TRS I actually can recoup that loss elsewhere?

I have no idea of this stuff. Any links?

See the link to the Revenue leaflet provided up thread.

You can deduct 75% of your mortgage INTEREST (NOT full mortgage payment!) from gross income (so for example if you paid 10k in interest and took 10k in rent, you could deduct 7.5k from the 10k (and other things like insurance, depreciation) before calculating your taxable profit. You can deduct other stuff too, including the cost of the accountant to help you

If you make a loss, you can carryit forward to offset a gain in following years. You should read up as much as you can find online (check askaboutmoney.com in their property investment section for an FAQ) and then armed with that knowledge, approach a tax professional to help you with your first returns.

You'll have to take a very professional attitiude to renting out your property. For whatever reason, you are now a landlord. (is the property already let?)

odds_on

snubbleste wrote: »

You don't need to appoint an agent to manage your property, it's either that or your tenants withold 20% of the rent and pass it to Revenue.

However, you are required to provide the tenant with a contact number/address in case of emergencies, not to mention other issues that may need to be rectified "within a reasonable time", which is generally understood to be plus or minus 14 days, depending on the complexity of the problem. Personally, I do not believe that a tenant who has to phone abroad satisfies that condition. (In the UK, if a landlord or his agent does not have an address in the UK, the tenant does not have to pay the rent!)

If your tenant decides to leave/assign his remaining part of the lease, how will you refund him his deposit?

kegzmc

odds_on wrote: »

However, you are required to provide the tenant with a contact number/address in case of emergencies, not to mention other issues that may need to be rectified "within a reasonable time", which is generally understood to be plus or minus 14 days, depending on the complexity of the problem. Personally, I do not believe that a tenant who has to phone abroad satisfies that condition. (In the UK, if a landlord or his agent does not have an address in the UK, the tenant does not have to pay the rent!)

If your tenant decides to leave/assign his remaining part of the lease, how will you refund him his deposit?

I have provided them with my Irish phone number which I have kept the contract on for. They will never have to phone abroad.

In addition to this I have appointed a management company to handle any issues they may have.

They collect the rent also.

murphaph

kegzmc wrote: »

I have provided them with my Irish phone number which I have kept the contract on for. They will never have to phone abroad.

In addition to this I have appointed a management company to handle any issues they may have.

They collect the rent also.

You need to register this tenancy immediately with the PRTB or you could be leaving yourself open to all sorts of problems. It's also a precondition for claiming that 75% of mortgage interest. Revenue check with the PRTB!

kegzmc

OK thanks for the advice. I will register this over the weekend. DO you know if this c an be done online?

sunnysoutheast

kegzmc wrote: »

OK thanks for the advice. I will register this over the weekend. DO you know if this c an be done online?

Yes you can register it online.

Can also print off the form to deregister from TRS from revenue.ie.

SSE

StillWaters

Don't forget the NPPR tax also, this too is required in order to offset interest against tax due.

Mickey Dazzler

In a simular situation to the OP.....

I have paid the Household Charge, NPPR, PTSB, Insurance...

I am also non resident now but my tenants are not withholding 20% of the rent and paying it to the revenue.

My understanding is that as 75% of the interest portion of the mortgage including deductions for mgmt fee etc.... in greater than the amount of total rent I receive then there is no tax liability.

If I submit my return at the end of the year clearly showing this then there is no need to get the tenant to with hold 20% of the rent....

Is this correct???

kegzmc

This raises another question for me now too. I have another house in Ireland too which I have paid the NPPR charge on.

Now I am no longer living in the other house am I liabable for another NPPR?

murphaph

kegzmc wrote: »

This raises another question for me now too. I have another house in Ireland too which I have paid the NPPR charge on.

Now I am no longer living in the other house am I liabable for another NPPR?

Yes.

murphaph

Mickey Dazzler wrote: »

In a simular situation to the OP.....

I have paid the Household Charge, NPPR, PTSB, Insurance...

I am also non resident now but my tenants are not withholding 20% of the rent and paying it to the revenue.

My understanding is that as 75% of the interest portion of the mortgage including deductions for mgmt fee etc.... in greater than the amount of total rent I receive then there is no tax liability.

If I submit my return at the end of the year clearly showing this then there is no need to get the tenant to with hold 20% of the rent....

Is this correct???

Going strictly by the rules, the tenant should forward the 20% to Revenue and you should apply for a refund for overpayment of tax! (but as I said before, Revenue seem happy to ignore this silly rule so long as returns are being made).

You should make a return even if no tax is due so you can show your loss to Revenue (losses can be carried forward!) and just to keep it all above board and stop Revenue getting suspicious.

If your total allowable costs exceed your gross rent then you have made a loss and no tax would be due, correct.

nompere

The Ombudsman has been complaining to Revenue about this for many years.
http://www.ombudsman.gov.ie/en/Publications/Annual-Reports/2009-Annual-Report/AnnualReport2009/chapter6.html

This is part of the report for 2009, and refers back to 1998.

The Ombudsman only gets involved in actual rather than hypothetical cases so it is a real problem - and it is the tenant who suffers. The tenant isn't in a position to know whether the landlord is or is not making returns.

kegzmc

I spoke to an accountant in relation to this today.

He said that I would be better of not saying anything and carry on as normal as there tend to be tax implications for landlords living abroad further down the line.

This I am not comfortable with. For peace of mind I would much rather have everything legitimate.

Heres what I am going to do.

I need to sign up as a landlord. Then contact Revenue and cancel TRS. The tenents pay me as usual ( the 20% rule to revenue is not enforced)

Then for tax purposes what must I keep ? Do I need rent receipts? etc

How do I claim the TRS equivelent of TRS?

murphaph

kegzmc wrote: »

I spoke to an accountant in relation to this today.

He said that I would be better of not saying anything and carry on as normal as there tend to be tax implications for landlords living abroad further down the line.

This I am not comfortable with. For peace of mind I would much rather have everything legitimate.

Heres what I am going to do.

I need to sign up as a landlord. Then contact Revenue and cancel TRS. The tenents pay me as usual ( the 20% rule to revenue is not enforced)

Then for tax purposes what must I keep ? Do I need rent receipts? etc

How do I claim the TRS equivelent of TRS?

Some accountant!

You are well advised to ignore his advice to defraud Revenue if you want to avoid a spell in the Joy alright.

You should keep any and all receipts in relation to the property for at least (I think) 7 years in case you are audited. No receipts are ever actually submitted with your tax returns.

You don't "claim" the equivalent of TRS like TRS. You simply deduct 75% (at present, could change-keep an eye on the rules) of mortgage interest paid in the tax year from your gross rent (as well as any other deductions you can make) and that's it. There's no form to fill in, it's simply an allowable expense like the plumber who fixes your leaking radiator etc.

Have you read the leaflet linked to above? To me it seems you're somewhat rushing into this without doing your homework, no offence, and you could end up in tears if it goes pear shaped mate.

kegzmc

murphaph wrote: »

Some accountant!

You are well advised to ignore his advice to defraud Revenue if you want to avoid a spell in the Joy alright.

You should keep any and all receipts in relation to the property for at least (I think) 7 years in case you are audited. No receipts are ever actually submitted with your tax returns.

You don't "claim" the equivalent of TRS like TRS. You simply deduct 75% (at present, could change-keep an eye on the rules) of mortgage interest paid in the tax year from your gross rent (as well as any other deductions you can make) and that's it. There's no form to fill in, it's simply an allowable expense like the plumber who fixes your leaking radiator etc.

Have you read the leaflet linked to above? To me it seems you're somewhat rushing into this without doing your homework, no offence, and you could end up in tears if it goes pear shaped mate.

Could you actually end up in Mountjoy for this?

murphaph

kegzmc wrote: »

Could you actually end up in Mountjoy for this?

Tax evsion is a serious offence (for the little people like us!)